New foreign trade policy 2023

Context– Recently  the Union Commerce , Industry and Textiles  minister  unveiled the   new foreign trade policy that moves beyond providing incentives to exporters to lowering costs  for smaller firms and swift clearances.

 Key highlights of the new policy:

•  It aims for export promotion initiatives that  include encouraging international trade settlement in Indian currency.
•  It aims at tripling exports to $ 2 trillion by 2030 from $760 billion in 2022-23.
• The policy allows  for adjustments on world trade and industry feedback.
•   It focuses on lowering costs for smallest firms and offering swiffer clearances.

 Major objectives of the new foreign trade policy:

•  The new foreign trade policy  aims to move its approach from incentive based regime to remission of taxes regime.
• It looks for ease of doing business by digitizing applications, lowering transaction costs for exporters. The application fee is to be reduced for advanced authorisation  and EPCG schemes for MSMEs.
•  It aims to develop new emerging areas like ecommerce developing districts as export hubs.
•  The policy aims to open up new areas of export like- merchanting trade.
• Exporters in India can source goods from another country  and send them to a third country  without touching Indian  shores and help in the export of restricted goods.
•  The focus of the policy is  simplifying policy to facilitate export of dual -use- high -end goods and technology such as UAVs, cryogenic tanks and certain chemicals.
•  The policy aims to drive international trade settlement in the Indian rupee(INR) , granting benefits to those exports that are paid via the rupee.
•  The new policy  shall have no sunset date and will be changed based on emerging world trade scenarios and industry  feedback. The policy is open ended but the scehems sanctioned will be time bound.

What is advanced authorisation  and EPCG?

 Advanced authorisation  is a scheme that allows duty free import of inputs that are to be used in products  to be exported in a specified time. The products are not allowed  for domestic sale. The authorisation is valid for 12 months from date of issue.

 Export  promotion capital goods (EPCG) scheme- It is a scheme under the directorate  general of foreign trade (DGFT) , ministry of commerce and industry . The scheme aims to facilitate import of capital goods like  computer systems, software , spares, moulds, dies, jigs,fixtures,tools ,refractories for producing quality goods and services  and enhancing  India’s manufacturing competitiveness. It allows  import of capital goods for pre- production, production and post production at zero  customs duty.

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